Army Awards $7.86 Billion for Logistics Support Services to KBR Services, LLC
Contract Overview
Contract Amount: $7,865,825,758 ($7.9B)
Contractor: KBR Services, LLC
Awarding Agency: Department of Defense
Start Date: 2006-08-22
End Date: 2012-12-30
Contract Duration: 2,322 days
Daily Burn Rate: $3.4M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: 200612!001884!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0139 ! !20060822!20120131!133469119!133469119!964409007!N!KELLOGG BROWN&ROOT SERVICES,!4100 CLINTON DRY !HOUSTON !TX!77020!00000! !IZ! ! !IRAQ !+000400000000!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !561210!E! !5!B!S! ! ! !99990909!B! ! !A! !A!U!R!2!003!B! !Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001! !
Plain-Language Summary
Department of Defense obligated $7.87 billion to KBR SERVICES, LLC for work described as: 200612!001884!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0139 ! !20060822!20120131!133469119!133469119!964409007!N!KELLOGG BROWN&ROOT SERVICES,!4100 CLINTON DRY !HOUSTON !TX!77020!00000! !IZ! ! … Key points: 1. Significant contract value of $7.86 billion for logistics support. 2. Competition was full and open, indicating a competitive bidding process. 3. Potential risk associated with long-term, large-scale service contracts. 4. Sector is primarily Facilities Support Services, crucial for military operations.
Value Assessment
Rating: questionable
The contract value is substantial at $7.86 billion. Without specific per-unit cost data or benchmarks for similar logistics support services in Iraq during that period, it's difficult to definitively assess pricing efficiency. The Cost Plus Award Fee structure can incentivize performance but also carries inherent cost-plus risks.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust process for soliciting bids and selecting a contractor. This method generally promotes competitive pricing, though the final cost is influenced by the Cost Plus Award Fee structure and the complexities of the services provided.
Taxpayer Impact: While competition aims for efficiency, the large scale and duration of this contract, coupled with the Cost Plus Award Fee structure, mean taxpayer funds are significantly committed. Oversight is critical to ensure value for money.
Public Impact
Impacts military readiness and operational effectiveness through essential logistics support. Affects the economic landscape by awarding a large contract to a single entity. Highlights the significant financial commitment required for sustained overseas operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee structure can lead to cost overruns.
- Long contract duration increases exposure to changing operational needs and risks.
- Services provided in a high-risk environment (Iraq) may incur additional costs and complexities.
Positive Signals
- Full and open competition suggests a potentially competitive initial bid.
- Award fee mechanism can incentivize contractor performance and efficiency.
- Contract supports critical military operations, ensuring essential services are delivered.
Sector Analysis
This contract falls within the Facilities Support Services sector, which encompasses a broad range of services necessary for the operation and maintenance of facilities. Spending in this sector for defense is often substantial, especially during periods of significant military deployment, reflecting the high demand for logistical and operational support.
Small Business Impact
The data indicates this contract was awarded to KBR Services, LLC, and does not explicitly mention subcontracting opportunities for small businesses. Large, comprehensive service contracts like this can sometimes limit direct participation by small businesses, although they may indirectly benefit through subcontracts.
Oversight & Accountability
Oversight of such a large and long-term contract is crucial. The Department of the Army and potentially other oversight bodies would be responsible for monitoring performance, costs, and adherence to contract terms, especially given the Cost Plus Award Fee structure and the operational environment.
Related Government Programs
- Facilities Support Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Significant contract value ($7.86B) represents a large financial commitment.
- Cost Plus Award Fee structure carries inherent risk of cost overruns.
- Long contract duration (approx. 8 years) increases exposure to changing requirements and risks.
- Services provided in a high-risk operational environment (Iraq).
- Lack of detailed per-unit cost data makes definitive value assessment difficult.
- Potential for limited small business participation.
Tags
facilities-support-services, department-of-defense, delivery-order, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $7.87 billion to KBR SERVICES, LLC. 200612!001884!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0139 ! !20060822!20120131!133469119!133469119!964409007!N!KELLOGG BROWN&ROOT SERVICES,!4100 CLINTON DRY !HOUSTON !TX!77020!00000! !IZ! ! !IRAQ !+000400000000!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !561210!E! !5!B!S! ! ! !99990
Who is the contractor on this award?
The obligated recipient is KBR SERVICES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $7.87 billion.
What is the period of performance?
Start: 2006-08-22. End: 2012-12-30.
What was the actual final cost of the contract, and how did it compare to the initial estimated value, considering the Cost Plus Award Fee structure?
The initial contract value was $7.86 billion. The final cost would depend on the contractor's performance against award fee criteria and the actual costs incurred. Cost Plus Award Fee contracts inherently allow for costs to fluctuate based on performance and incurred expenses, making a direct comparison to an initial estimate challenging without detailed financial reporting and audit data.
How effectively did the full and open competition process ensure the best possible price and value for the taxpayer, given the nature of logistics support in a conflict zone?
Full and open competition is designed to foster price discovery and value. However, the complexities and risks associated with providing logistics in a conflict zone like Iraq can significantly impact pricing. While competition likely drove down initial bids, the Cost Plus Award Fee structure and unforeseen operational challenges could have led to costs exceeding initial expectations, necessitating robust oversight to ensure value.
What were the key performance indicators (KPIs) used to determine the award fee, and how did KBR Services, LLC perform against these metrics?
The specific KPIs for the award fee are not detailed in the provided data. Typically, for logistics support services, KPIs might include on-time delivery rates, service availability, cost control measures, safety compliance, and responsiveness to operational needs. Performance against these metrics would directly influence the 'award' portion of the fee, impacting the total compensation received by the contractor.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 3
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Brown & Root Industrial Services Holdings, LLC
Address: 601 JEFFERSON ST, HOUSTON, TX, 77002
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DAAA0902D0007
IDV Type: IDC
Timeline
Start Date: 2006-08-22
Current End Date: 2012-12-30
Potential End Date: 2012-12-30 12:12:00
Last Modified: 2025-07-31
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